DOGE, XRP Slip 3% While Bitcoin Investors Await Fed Announcement on Wednesday

Bitcoin Holds Firm as Traders Await Fed Decision, Altcoins See Modest Declines

Crypto market analysts at QCP Capital suggest that while a rate cut remains off the table, any dovish signals from the Federal Reserve could provide a bullish catalyst for bitcoin and, in turn, the broader crypto market.

On Tuesday, the crypto market remained largely stable, though some major altcoins saw slight losses. Dogecoin (DOGE) and XRP led the decline among top tokens, each slipping over 3% in the past 24 hours. The CoinDesk 20 Index (CD20), which tracks the performance of leading cryptocurrencies, dropped 2%.

The lack of volatility is due to traders largely positioning themselves ahead of Wednesday’s Federal Open Market Committee (FOMC) meeting. The outcome of this meeting is expected to influence monetary policy and set the tone for risk assets, including cryptocurrencies.

The Federal Reserve is widely expected to keep interest rates steady at 4.25%–4.50%, but any commentary from Fed Chair Jerome Powell could impact investor sentiment. A hawkish stance—signaling prolonged higher rates—could pressure bitcoin prices, while a dovish outlook could provide the relief needed to fuel another rally.

“A rate cut remains highly unlikely as the U.S. pivots away from fiscal dominance—where government spending drove growth—toward [President Donald] Trump’s focus on deficit reduction,” QCP Capital traders noted in a Tuesday briefing. “This shift places greater weight on monetary policy. While an immediate rate cut is unlikely, any dovish tilt from Powell could spark renewed upside momentum.”

QCP Capital also pointed to a possible rotation in capital flows away from Trump-fueled momentum trades such as NASDAQ and bitcoin toward long-overlooked European and Chinese markets. Historically, crypto has lagged behind shifts in global liquidity cycles, the firm added.

Meanwhile, Agne Linge of WeFi highlighted that market sentiment remains fragile, with the crypto fear and greed index sitting at 22, indicating “extreme fear” as investors remain wary of inflation, trade wars, and geopolitical instability.

“In the U.S., the S&P 500 and Nasdaq Composite saw their fourth consecutive weekly declines, while the Dow Jones lost 3.1%—its worst weekly showing in nearly two years. The previous week’s downturn was significant, but further uncertainty looms for the remainder of the month,” Linge said, emphasizing that macroeconomic challenges could weigh on bitcoin prices.

According to Ryan Lee, chief analyst at Bitget Research, bitcoin is currently trading within a tight range, with the potential to move toward either $75,000 or $90,000 depending on market reaction to the Fed’s decision.

“Bitcoin’s recent price action is part of a normal post-rally consolidation. The key support levels traders are watching are between $82,000 and $85,000,” Lee explained in an email to CoinDesk. “If sentiment remains cautious, we could see bitcoin testing the $75,000–$80,000 range. On the flip side, a favorable macroeconomic outlook could push prices back toward $90,000.”